FAIR PRACTICES CODE

Pursuant to the Notification issued by the Reserve Bank of India by its Circular No.RBI/2006-07/138 DNBS (PD) CC No. 80/03.10.042/2005-06 dated September 2008, 2006; Asirvad Microfinance Private Limited adheres to the following Fair Practices Code.

"To empower at least one million families by 2013 by providing financial assistance"

Introduction :

Asirvad Microfinance Private Limited is a Non Banking Finance Company with license issued by the Reserve Bank of India. The Company was established in August 2007. The management team is headed by a CEO and supported by a professional team with lot of expertise in area of Microfinance and SHG lending business. These professionals have worked in various Banks and financial institutions and have good commercial experience.

About the company :

The Company being in financial sector provides loans to poor women organized into groups of 20 to 30 each. To service these types of customers the Company through its own field force encourages women to form a homogenous group in the locality where they live and after a meeting track record of 2 to 4 weeks the loan assistance is given to them.

Under the organizational set up the Company has branches located in urban centre to cater to the urban poor. These branches are being headed by a Professional Branch Manager (BM) and they are in turn assisted by a team of Field Development Officers (FDO) from the branch who meet the customers to understand their requirements. These FDOs attend the weekly meetings of the group members on a regular basis. Both the BM and FDO’s of the Company follow a relationship approach in establishing a credit relationship between the Company and the borrower. Facilities are granted on the basis of completed applications, completing the KYC process, discussion with the customers about the term of their loan, rate of interest, repayment arrangement, etc. The branch services within a radius of few Kms of the customers in a particular area in the city.

Our general policy is to be reasonable, transparent and fair with the customers. The Company would like to follow established procedures, understand customer's requirement and be reasonable in all our dealings from time to time. The application forms designed and the relationship process is to make sure that we are transparent in our dealings and transactions. It is with this in mind the Company has set up the following guidelines as a Fair Practices code in dealing with our customers on day to day basis.

GUIDELINES

1. The membership application form captures full details of the customer - age, husbands name, profession, business, residential address, No of members in the family, educational qualification, marital status, community & religion she belongs to, income details and other requirements. The form also captures details of the type of residence and also the documents required for KYC certification. The application forms specify the documentation requirements in addition to initial scrutiny of documents submitted. After the membership form is submitted, we provide the women who are formed into groups a notebook for recording the minutes of the group meetings. In the note book, the women acknowledge that they have understood the terms and conditions of the loan, the interest rate and the repayment period of the loans.


2. All applications will be verified and processed within a reasonable period of time. The application would go through an internal procedure and also a fraud check before loans are processed or approved. The applications which do not satisfy the procedure would automatically be rejected. Documents needed from the customers will be collected before disbursement of loan.


3. The terms and conditions of the loan are clearly spelt out in the loan application which is also countersigned by other group members. The details of the loan are indicated in a pass book which would specify the tenure of the loan, the amount of the loan, the rate of interest, the weekly payments payable to the Company. Documentation charges are clearly spelt out to the customer.


4. In the event the loan is rejected the Company would communicate to the Customer verbally or by recording in the minutes note book provided in the centre about the rejection. The Branch Managers are empowered to convey verbally the rejection of the loan.


5. Customers at the time of disbursement are advised about their facilities and the repayments they need to make from time to time. In any event the Company undertakes to give full details of the loan, its current status, weekly repayments required from time to time on the basis of request made by the Customers.


6. Loans are being provided now without any collateral. However as and when we take securities for giving loan, we shall be releasing all securities on repayment of all dues or on realization of the outstanding amount of loan, subject to any legitimate right or lien for any other claim the Company may have against the borrower. If such right of set off is to be exercised, the borrower shall be given notice about the same with full particulars about the remaining claims and conditions under which the Company is entitled to retain the securities till the relevant claim is settled / paid.


7. In case of request of a transfer of a borrowal account from a borrower or a lender to another Company or a Bank such transfer would be completed within 21 days of such request, provided the customer pays interest and all Company dues up to date.


8. As far as recoveries of loans are concerned the Company shall refrain from interference in the affairs of the borrower except for the purposes provided in the terms and conditions of the loan agreement (unless the company is in receipt of new information not earlier disclosed by the borrower).


9. In addition, the collection policy revolves on the concept of peer pressure. However, under the Company's collection policy, the Company shall not resort to undue harassment viz., persistently bothering the borrowers at odd hours, use of muscle power for recovery of loans. Our collection procedures are constantly checked from a customer’s point of view.

The Company has a detailed policy on customer satisfaction and complaints received. As part of the Customer satisfaction a detailed analysis of customer behavior and their grievances or responses are taken into account in improving our operations on day to day basis. Compliant received are personally attended to by the Branch Manager and resolutions are tracked by the corporate office in Chennai. All grievances and complaints and resolution made would be put to the Board of Directors for their review from time to time.